Gold pares losses after Draghi comments, dismal U.S. jobless claims

           Gold futures pared losses during U.S. morning hours on Thursday, bouncing off the lowest levels of the session following comments from European Central Bank President Mario Draghi and after data showed U.S. jobless claims hit a four-month high last week.

But gold prices struggled for upside traction due to a slightly stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.85% to trade at 83.58, the strongest level since August.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,549.45 a troy ounce during U.S. morning trade, down 0.25% on the day.

Comex gold prices fell by as much as 0.9% earlier in the session to hit a daily low of USD1,539.85 a troy ounce the weakest level since May 30, 2012.

Gold prices were likely to find support at USD1,532.75 a troy ounce, the low from May 30 and resistance at USD1,604.25, the high from April 2.

Speaking at the ECB’s post-policy meeting press conference, Draghi said that monetary policy will remain "accommodative" for as long as needed.

Draghi’s comments came after the ECB left rates on hold at a record low 0.75% earlier, in a widely anticipated decision.

Gold prices bounced off the lowest levels of the session after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits rose by 28,000 to a four-month high of 385,000 last week, confounding expectations for a decrease of 7,000 to 350,000.

Market players now looked ahead to Friday’s highly-anticipated U.S. monthly jobs report to further asses the strength of the country’s economy and the need for further stimulus from the Federal Reserve.

Any improvement in the U.S. economy could scale back expectations for additional easing by the Fed, boosting the U.S. dollar and weighing on dollar-denominated commodities.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.

Gold prices were also supported after the Bank of Japan announced that it was launching an aggressive easing program in order to achieve its 2% inflation target.

At the end of a two-day meeting, the central bank said it would double the money supply through purchases of government bonds and other measures.

Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
Gold futures have fallen more than 3% this week as a bout of technical selling kicked in after prices broke below key support levels earlier in the week, triggering fresh sell orders amid bearish chart signals.

Gold could see further losses in the near-term, with market analysts warning of a possible move towards the USD1,530-level.

Elsewhere on the Comex, silver for May delivery shed 0.15% to trade at USD26.75 a troy ounce. Comex silver fell by as much 0.5% earlier in the session to hit a low of USD26.58 a troy ounce, the weakest level since July 24.

Meanwhile, copper for May delivery fell 0.1% to trade at a nine-month low of USD3.329 a pound.